We have some key US data through the week, culminating in the US payrolls release on Friday. Ahead of this is the US Q3 GDP estimate (preliminary) on Tuesday with the ADP survey on Wednesday. All of this comes ahead of the key risk event next weekend in the form of the Italian referendum, and the combination of the above have been more than enough to contain the EUR/USD correction into the upper 1.0600’s.
We anticipated sellers ahead of 1.0700, but whether this is enough to generate fresh steam for another 1.0500 retest, will have to wait until the data releases ahead. It is also month's end, where a number of rebalancing measures have pointed to some USD selling requirements. Much of this is likely into the London fix(es), with Wednesday a potentially lively affair. USD/JPY has had a meteoric rise from the low 101.00’s to pre 114.00 last week, and Asia today saw some notable redress to 111.35, but the market is already back above 112.50.
Similarly, USD/CHF is still eyeing 1.0200, but little overall momentum in the market today, with all eyes on Wall Street from here in relation to the safe haven/funding currencies. Month end buying of EUR/GBP in evidence as we have tested into the upper .8500’s, but sellers here waiting ahead of .8600 in line with Cable demand from 1.2400. The latter spot rate has dipped to 1.2380-85, with plenty more interest seen into the 1.2200’s.
Some positive rhetoric out of the OPEC talks early on, but late in the day we heard Iran’s position has not softened. Modest oil price gains were halved as a result, though USD/CAD maintained its circa 1.3400 lows. AUD/USD is still eyeing a move on .7500, while NZD stabilises in the mid .7000’s. Base metals supportive here, but gains on the cautious front as USD dip buyers lying in wait.